U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

(Mark One)

[x]          QUARTERLY REPORT PURSUANT SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

         For the quarterly period ended: September 30, 1997

[ ]          TRANSITION REPORT PURSUANT SECTION 13 OF 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

         For the transition period from _________________ to _______________

                         Commission file number 0-17232

                           CAPITAL RESERVE CORPORATION
        (Exact name of small business issuer as specified in its charter)

           COLORADO                                             84-0888594
(State or other jurisdiction of                             (IRS Employer
 incorporation or organization)                           Identification No.)

           7860 EAST BERRY PLACE, SUITE 215, ENGLEWOOD, COLORADO 80111
                    (Address of principal executive offices)

                                  (303)220-5030
                           (Issuer's telephone number)

                                 NOT APPLICABLE
              (Former name, former address and former fiscal year,
                          if changed since last report)

         Check whether the issuer (1) filed all reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing  requirements  for the past 90 days.
Yes _X_ No ___

         State the number of shares  outstanding of each of the issuer's classes
of common equity, as of the last practicable date:

           546,045 SHARES OF CLASS A COMMON STOCK, NO PAR VALUE, AS OF
                               SEPTEMBER 30, 1997

         Transitional Small Business Disclosure Format (check one); Yes__  No_X_
Exhibit index on page 10                                      Page 1 of 18 pages

                                        1

<PAGE>










                         Independent Accountants' Report


Board of Directors

Capital Reserve Corporation



The accompanying consolidated balance sheet of Capital Reserve Corporation as of
September 30, 1997,  and the related  consolidated  statements of operations for
the three months and nine months ended  September  30, 1997,  and cash flows for
the  nine  months  ended  September  30,  1997,  were  not  audited  by us,  and
accordingly,  we do not  express  an  opinion  on them.  The  1996  consolidated
financial  statements  of Capital  Reserve  Corporation  were  compiled by other
accountants  whose  report  dated  October  18,  1996,  stated that they did not
express an opinion or any other form of assurance on those statements.

Consistent with the requirements of Item 310(b) of Regulation S-B management has
elected to omit  substantially  all of the  disclosures  required  by  generally
accepted accounting principles.  If the omitted disclosures were included in the
financial  statements,  they might  influence the user's  conclusions  about the
Company's  financial  position,  results  of  operations,  and its  cash  flows.
Accordingly,  these financial  statements are not designed for those who are not
informed about such matters.




/s/BRADEEN, CAMPBELL & CLAAR, CPA'S
Bradeen, Campbell & Claar, CPA's


Denver, Colorado

October 23, 1997


                                        2

<PAGE>






 <TABLE>
<CAPTION>
                                       CAPITAL RESERVE CORPORATION

                                        Consolidated Balance Sheet

                                            September 30, 1997

                                               (Unaudited)



<S>                                                                                            <C>    
ASSETS

CURRENT ASSETS
  Cash and cash equivalents                                                                    $         24,831
  Accounts receivable                                                                                        93
  Marketable securities                                                                                  83,165
                                                                                                    -----------
   Total currents assets                                                                                108,089


EQUIPMENT - AT COST
  Furniture and equipment                                                                                34,701

  Less accumulated depreciation                                                                    (     13,321)
                                                                                                    -----------

                                                                                                         21,380
  OTHER ASSETS

  TOTAL ASSETS                                                                                  $       129,469
                                                                                                     ==========



LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable and accrued liabilities                                                     $         65,529
                                                                                                    -----------
      Total current liabilities                                                                          65,529
                                                                                                    -----------

  STOCKHOLDERS' EQUITY
  Class A common stock                                                                                3,138,102
  Class B preferred stock                                                                                50,000

  Accumulated deficit                                                                                (3,124,162)



                                                                                                         63,940

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                       $      129,469
                                                                                                     ==========
</TABLE>


See accountants report and notes to financial statements


                                        3

<PAGE>





<TABLE>


                                       CAPITAL RESERVE CORPORATION

                                  Consolidated statements of operations

                                               (Unaudited)

<CAPTION>


                                                       Three months ended                        Nine months ended
                                                         September 30,                             September 30,
                                                --------------------------------        ------------------------------------


                                                    1997               1996                     1997                1996
                                                    ----               ----                                         ----
<S>                                             <C>                <C>                   <C>                   <C>          
Revenues
  Insurance residuals                             $        4,759      $     4,532        $           13,314    $         13,648
  Consulting revenues                                          -                -                     2,500                   -
  Interest and dividends                                     168              878                     1,941               5,941
  Investment gains (Loss)                               (12,275)         (17,284)                    57,083              32,332
  Loss on sales of vehicles                                    -                -                  (16,168)                   -
  Other                                                    1,888              240                    13,838                 945
                                                         -------        ---------                                    ----------

    Total revenues                                      ( 5,460)         (11,634)                    72,508              52,866
                                                         ------           ------                                       --------

Expenses
  General and administrative                              13,936           89,150                   184,286             275,974
  Interest                                                     -                -                         -               1,294
  Other                                                        -                -                         -              12,462
                                                     -----------      -----------                                      --------

    Total expenses                                        13,936           89,150                   184,286             289,730
                                                          ------           ------                                       -------

Net (loss) from continuing                              (19,396)        (100,784)                 (111,778)           (236,864)
operation

Gain on sale of building                                       -          122,042                         -             122,042
Loss  from discontinued rental
  operations                                                   -         (11,135)                         -          (  13,006)
                                                     -----------          ------                                      --------

Net income (loss)                                 $     (19,396)       $   10,123        $        (111,778)    $      (127,828)
                                                     -----======           ======                  =======             =======


Net (loss) per common share
  Continuing operations                           $        (.04)   $        (.18)        $            (.21)    $          (.42)
  Discontinued operations                                      -              .20                         -                 .19
                                                     -----------        ---------              ------------         -----------

Net (loss) per common share                       $        (.04)    $         .02        $            (.21)    $          (.23)
                                                      =========         =========              ===========         ===========

</TABLE>

See accountants report and notes to financial statements

                                        4

<PAGE>






<TABLE>

                                       CAPITAL RESERVE CORPORATION

                                  Consolidated Statements of Cash Flows

                                               (Unaudited)

<CAPTION>


                                                                                Nine months ended
                                                                                  September 30,
                                                               ---------------------------------------------------

                                                                         1997                          1996
                                                               -------------------------     ------------------------
<S>                                                               <C>                               <C>              
Operations activities:
  Net loss                                                        $            (111,778)            $       (127,828)
  Reconciling adjustments:
     Depreciation and amortization                                                 6,218                       14,591
     Gain on Investment                                                         (57,083)                     (32,332)
     Loss on sale of assets                                                       16,168                    (122,042)
     Loss (gain) on extinguishment of debt                                             -                       12,462

Changes in assets and liabilities:
  Other current assets                                                            32,511                       27,546
  Accounts payable and accrued liabilities                                     (180,451)                   (  35,134)
                                                                                -------                     --------

     Total adjustments                                                         (182,637)                    (134,909)
                                                                                -------                      -------

Net cash used for operating activities                                         (294,415)                    (262,737)

Investing activities:
  Investments in common stock                                                   (17,767)                    (184,766)
  Sales of investments in common stock                                            91,138                      174,550
  Proceeds from sale of assets                                                    16,500                      501,275
  Proceeds from other investments                                                      -                        8,637
  Purchase of property                                                                 -                   (  28,564)
                                                                            ------------                    --------

    Net  cash provided by investing activities                                    89,871                      471,132
                                                                                --------                     --------

Financing activities:
  Payment on note payable - related party                                              -                    (196,000)
  Purchase of treasury stock                                                           -                  (    2,000)
                                                                            ------------                   ---------

    Net  cash used for financing activities                                            -                    (198,000)
                                                                            ------------                     -------

Net change in cash and cash equivalents                                        (204,544)                       10,395
Cash and cash equivalents at beginning of period                                 229,375                      346,304
                                                                                 -------                      -------

Cash and cash equivalents at end of period                        $               24,831            $         356,699
                                                                                ========                      =======

</TABLE>

See accountants report and notes to financial statements

                                        5

<PAGE>



                           CAPITAL RESERVE CORPORATION

                   Notes to Consolidated Financial Statements

                               September 30, 1997

                                   (Unaudited)

NOTE A - MANAGEMENT'S STATEMENT

In the opinion of management,  the accompanying unaudited consolidated financial
statements  contain all  adjustments  (all of which are normal and  recurring in
nature)  necessary to present fairly the financial  position of Capital  Reserve
Corporation  as of September  30, 1997,  and the results of  operations  for the
three months and nine months ended  September 30, 1997, and 1996, and cash flows
for the nine  months  ended  September  30,  1997,  and  1996.  The Notes to the
Consolidated Financial Statements which are contained in the Form 10-K should be
read in conjunction with these consolidated financial statements.

NOTE B - NOTE PAYABLE

In May 1996, the Company  settled a disputed note payable to a stockholder.  The
Company paid the stockholder $73,000 cash and issued a new $123,000 note payable
in settlement of the $183,538 recorded payable balance.  A settlement expense of
$12,462  was  recorded.  The new  $123,000  note was  paid  upon the sale of the
building on July 3, 1996.

NOTE C - BUILDING SALE

On July 3,  1996,  the  Company  sold the  building  which was the source of its
rental revenue.  The Company has a gain on sale of $122,042 in the third quarter
of 1996. Net rental  revenues and expenses have been  classified as discontinued
operations in these financial statements.

The Company has leased  space from the new owners of the  building  through July
1998 for an average rate of $1,375 per month.

                                        6

<PAGE>



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (ITEM 303)

LIQUIDITY AND CAPITAL RESOURCES

Working  capital at September 30, 1997,  was $42,560,  as compared to $99,254 at
December  31,  1996.  Since the  Company has no  significant  source of revenue,
working capital will continue to be depleted by operating expenses. Furthermore,
if the Company should generate an operating loss for the current year comparable
to the loss incurred for the year ended December 31, 1996, a substantial portion
of the Company's remaining cash and working capital will be depleted.

Current  liabilities  were $65,529 at September 30, 1997 as compared to $245,890
at December 31, 1996. The change in current  liabilities is primarily due to the
payment  of a  note  payable  to  a  shareholder,  expenses  incurred  with  the
settlement  of a lawsuit  regarding a former  subsidiary  of the Company and the
indemnification expenses associated therewith.

RESULTS OF OPERATIONS

Due to the sale of the  Company's  rental  real  estate,  the  Company no longer
receives  rental  revenues.  Rental  operations  are  reflected as  discontinued
operations  in the statement of  operations.  While the Company has continued to
receive  income (and losses) from insurance  residuals,  interest and dividends,
and investments,  these items are not a significant source of income compared to
the Company's operating expenses.

The Company had total  revenues of $72,508 and $52,866 for the nine months ended
September 30, 1997 and 1996, respectively.  For the three months ended September
30, 1997,  the Company's  revenues were  ($5,460).  As the result of the sale of
marketable securities, for the nine months ended September 30, 1997, the Company
recorded investment gains of $57,083, as compared to $32,332 for the same period
during 1996. The Company also generated other revenues of $13,838 in 1997, which
was largely due to the  recognition of partnership  income  received during 1996
from the Company's  2.25% interest in Andrews  Partners I, Ltd.  ("Andrews"),  a
Colorado limited partnership, engaged in real estate transactions.

General and  administrative  expenses  for the nine months ended  September  30,
1997,  include  legal  expenses  of  $57,339,  the  majority  of which have been
incurred  in  connection  with a lawsuit  regarding a former  subsidiary  of the
Company initiated in September, 1995, which was dismissed on April 10, 1997.

General and  administrative  expenses  for the nine months ended  September  30,
1997,  also  include  salaries of $49,500 and  related  payroll tax  expenses of
$4,484. Also included in general and administrative expenses for the nine months
ended  September  30, 1997,  are  accounting  and auditing  expenses of $11,730,
entertainment  and  development  expenses of $4,149,  and insurance  expenses of
$18,406.


                                        7

<PAGE>



As compared to the nine months ended September 30, 1996,  operating expenses for
the current period were 36% lower.  The net loss from continuing  operations for
the  nine  months  ended  September  30,  1997,   decreased  by  53%,  generally
attributable to a decrease in expenses.

The Company's present business operations do not generate sufficient revenues to
cover its  operating  expenses.  The Company,  through a  subsidiary  named Wall
Street  Investment  Corp.  ("Wall  Street"),  is attempting to start a financial
consulting company.  Whether Wall Street will prove to be viable and a source of
revenue is unknown.  For the nine months ended  September 30, 1997,  Wall Street
contributed  $2,500 in revenue to the  Company's  operations;  however,  for the
three  months  ended  September  30, 1997,  Wall Street did not  contribute  any
revenue to the Company's operations.

On October 22, 1997, Wall Street entered into a  sub-contracting  agreement with
Columbia Financial Group  ("Columbia")  pursuant to which Wall Street has agreed
to provide public relations services in connection with Columbia's contract with
Winner's Internet Network, Inc. ("Winners").  In consideration for Wall Street's
services, Columbia has agreed to transfer to Wall Street stock purchase warrants
for 50,000 shares of Winner's  stock,  with a purchase price of $2.50 per share,
exercisable for 12 months. As of November 13, 1997, the Company had not received
the stock purchase warrants from Columbia. Columbia has transferred 5,000 shares
of free trading Winner's common stock to Wall Street,  with another 5,000 shares
to be  transferred  by  November  20,  1997.  Columbia  must  also  transfer  an
additional  6,000 shares of Winner's  common stock to Wall Street,  at a rate of
1,000 shares every thirty days,  beginning  December 6, 1997.  As of November 5,
1997,  Winner's  common stock  (quoted on the  Over-the-Counter  Bulletin  Board
System,  operated by the National  Association of Securities Dealers,  under the
symbol "WINR") had bid and ask prices of $1.875 and $2.125, respectively.


                           PART II - OTHER INFORMATION

ITEM 1.           LEGAL PROCEEDINGS (ITEM 103)

                  Not Applicable.

ITEM 2.           CHANGES IN SECURITIES

                  Not Applicable

ITEM 3.           DEFAULTS UPON SENIOR SECURITIES

                  Not Applicable

ITEM 4.           SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

                  Not Applicable

                                        8

<PAGE>



ITEM 5.           OTHER INFORMATION

                  On November  10,  1997,  the Company  engaged the  services of
                  Bradeen,  Campbell & Claar CPA's,  P.C. to audit its financial
                  statements  for the fiscal  year  ending  December  31,  1997.
                  During the  Company's  two most  recent  fiscal  years and the
                  subsequent  interim  period  preceding the  engagement of this
                  firm,  the Company did not consult this firm  regarding any of
                  the matters identified in Item 304(a)(2) of Regulation S-K.

                  The  engagement  of  Bradeen,  Campbell  & Claar  CPA's,  P.C.
                  coincided with the  announcement  by John M. Hanson & Company,
                  P.C. of its resignation on November 10, 1997.

                  John M. Hanson & Company, P.C. audited the Company's financial
                  statements for each of the years ending  December 31, 1995 and
                  1996.  For the fiscal year ended  December 31,  1995,  John M.
                  Hanson &  Company,  P.C.  issued  a  qualified  report  on the
                  Company's  financial   statements.   The  first  qualification
                  related  to the  scope of the  audit  and the lack of  audited
                  financial statements for First West Life Insurance Company and
                  the inability to verify the  information  pertaining  thereto.
                  The  second   qualification   related  to  an  uncertainty  in
                  connection with the calculation of life insurance reserves and
                  actuarial items, which may not have been calculated  according
                  to  generally   accepted   accounting   principles.   A  third
                  qualification   related  to  the  Company's   not   separately
                  disclosing  the loss  from  operations  and the loss  from the
                  disposal  of  the  life  insurance  segment,  along  with  the
                  exclusion   of  all  footnote   disclosures   related  to  the
                  discontinued  life  insurance  operations,  all of which  were
                  required by generally accepted accounting principles.

                  For the fiscal year ended December 31, 1996, the report on the
                  financial  statements   contained  an  explanatory   paragraph
                  regarding  the  Company's  ability  to  continue  as  a  going
                  concern.

                  The  decision to change  auditors was approved by the board of
                  directors.  During the two most  recent  fiscal  years and the
                  subsequent   period   preceding  the  engagement  of  Bradeen,
                  Campbell & Claar CPA's, P.C., there were no disagreements with
                  John M.  Hanson & Company,  P.C.  on any matter of  accounting
                  principles or practices,  financial statement  disclosure,  or
                  auditing  scope  or  procedure,  which  disagreements,  if not
                  resolved to the  satisfaction of that firm,  would have caused
                  it  to  make   reference   to  the   subject   matter  of  the
                  disagreements in connection with its report, other than as set
                  forth above.


                                        9

<PAGE>



ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K (ITEM 601)
<TABLE>
                  A)       EXHIBITS
<CAPTION>

         REGULATION S-B                                                                     CONSECUTIVE
              NUMBER                        EXHIBIT                                        PAGE NUMBER
                   <S>     <C>                                                                   <C>
                   2       Plan of purchase, sale, reorganization
                           arrangement, liquidation, succession                                  N/A
                  3(i)     Articles of Incorporation as Amended(1)                               N/A
                  3(ii)    Bylaws as Amended(2)                                                  N/A
                   4       Instruments defining the rights of security
                           holders, including indentures                                         N/A
                  10.1     Settlement Agreement(3)                                               N/A
                  10.2     Sub-Contracting Agreement with Columbia
                           Financial Group                                                        12
                  11       Statement re computation of per share earnings(4)                     N/A
                  15       Letter on unaudited financial information(5)                          N/A
                  16.1     Letter from John M. Hanson  & Company, P.C.
                           regarding change in certifying accountants                             15
                  18       Letter on change in accounting principles                             N/A
                  19       Report furnished to security holders                                  N/A
                  22       Published report regarding matters submitted
                           to vote of security holders                                           N/A
                  23       Consents of experts and counsel                                       N/A
                  24       Power of Attorney                                                     N/A
                  27       Financial Data Schedule                                                17
--------------------------------
(1)      Incorporated  by reference to the  Exhibits  previously  filed with the
         Company's Annual Report on Form 10-K for the fiscal year ended December
         31, 1990.
(2)      Incorporated  by reference to the  Exhibits  previously  filed with the
         Company's  Annual  Report on Form  10-KSB  for the  fiscal  year  ended
         December 31, 1994.
(3)      Incorporated  by reference to the  Exhibits  previously  filed with the
         Company's Annual Report on Form 10-KSB/A Amendment No. 1 for the fiscal
         year ended December 31, 1996.
(4)      See Part I - Financial Statements.
(5)      See Part I - Financial Statements.
</TABLE>

         B)       REPORTS ON FORM 8-K:  None

                                       10

<PAGE>



                                   SIGNATURES

         In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                              CAPITAL RESERVE CORPORATION
                                              (Registrant)

Date:    NOVEMBER 14, 1997                    By: /S/RALPH W. NEWTON, JR.
         -----------------                        -----------------------
                                              Ralph W. Newton, Jr.
                                              Principal Financial and Accounting
                                              Officer and President

93097.10Q

                                       11
<PAGE>